Supercars great Scott McLaughlin crashed in Sunday afternoon practice at the Indianapolis 500 and ruined his chance to repeat last year’s pole-winning run, setting up a disastrous day for Team Penske.

McLaughlin qualified on Saturday inside the top 12 and was eligible to run for the pole later on Sunday. But he spun at Indianapolis Motor Speedway and immediately lifted both hands to his helmet as he braced for impact with the Turn 2 wall.

WATCH THE VIDEO ABOVE: Scott McLaughlin flies in scary Indy 500 crash.

Know the news with the 7NEWS app: Download today

The New Zealander’s car was destroyed and Team Penske said they would not attempt a qualifying run in a backup car, slotting him in at 12th on the grid.

McLaughlin, who last year led a Penske sweep of the front row in qualifying, was clearly deflated after he was released from the medical centre.

“I’m OK, I’m just really, really, really, really, really sorry for everyone at Team Penske,” McLaughlin said.

“It was talking to me and I sort of felt it, and I probably should have backed out, but you’re trying to complete a run to see what it feels like and was it worth the risk? Probably wasn’t. I’m incredibly sad.”

He said he felt fortunate the car did not go airborne into the catchfence, but the crash did cause damage to the track surface that IMS workers were fixing during a stoppage created by his wreck.

“They can build a new car for me, but I’m just really gutted more than anything,” McLaughlin said.

“It’s hard to take, like you wish it was for something, but it was for nothing, right? In practice.”

McLaughlin was also rattled to see his wife crying after his crash out of concern for him.

“They’re nervous about me. I wanted to get out of the car straight away just so she knew I was OK,” he said.

There have been three hard crashes in the last two days at Indianapolis.

Marcus Armstrong and Colton Herta both crashed on Saturday and Armstrong has to qualify on Sunday for the field of 33 using an unsuited back-up car.

Herta qualified inside the top 30 to lock himself into the field once his car was ready for qualifying.

Soon after McLaughlin’s crash, his Australian teammate Will Power and two-time defending Indianapolis 500 winner Josef Newgarden were disqualified from qualifying.

Power and Newgarden’s cars failed inspection and the trio will now start 10th, 11th and 12th in the race next Sunday (Monday AEST).

It was a devastating blow to the team owned by Roger Penske, who also owns IndyCar, the Indianapolis Motor Speedway and the Indy 500, which he has won a record 20 times.

Moments before the top-12 shootout began, rival team owner Chip Ganassi was among a chorus of competitors who accused Team Penske of cheating.

Right after Ganassi was seen complaining to a Penske executive, the cars for Newgarden and Power returned to the garage.

IndyCar announced the two cars had failed inspection and would not be allowed to qualify.

IndyCar technical director Kevin Blanch said Newgarden’s and Power’s cars had “a body fit violation on the rear attenuator”.

The rear attenuator is a safety device designed to absorb and reduce the force of impacts. It is a spec part that is not allowed to be modified.

Tim Cindric, president of Penske’s IndyCar program, said Power passed inspection but officials flagged Newgarden’s car. He also said the modification was not on McLaughlin’s car.

“It was a bit of randomness internally there that we need to sort out,” Cindric said.

He said IndyCar initially was going to allow modifications.

But Cindric acknowledged that modifications are not permitted after inspection and he also understood if other teams complained.

“It’s a shame we didn’t give our guys a chance to go for it,” Cindric said.

Newgarden, who is trying to become the first driver in 109 years to win three consecutive Indy 500s, was a contender to win the pole and was seen running off his anger in the infield.

A year ago, Team Penske was caught in a push-to-pass scandal in which Newgarden was found to have access to the additional boost of horsepower when he should not have.

He was stripped of his season-opening victory and Penske suspended Cindric for two races, which included the Indy 500.

Also suspended was team managing director Ron Ruzewski, Newgarden engineer Luke Mason and senior data engineer Robbie Atkinson.

The fast 12 was also reduced to just nine cars attempting to advance to the final qualifying round, when six drivers compete for the pole for the May 25 race. The six to advance were Felix Rosenqvist, Pato O’Ward, rookie Robert Shwartzman, Scott Dixon, Alex Palou and Takuma Sato.

Shwartzman went on to win the pole as the first Israeli driver to make the Indy 500 and the first rookie to win the pole since 1983.